It’s no secret that the healthcare industry is and has been a hot topic in recent days. I was recently browsing articles and came across a Greg Jericho article titled “Is Private Health Insurance a Con? The Answer is in the Graphs“. Although he was talking about the Australian health insurance market, Jericho writes, “We have a system that attempts to force young people to take out a private insurance policy they don’t want or particularly need in order to fund the use of it by older people.” I immediately equated this statement to the U.S. health insurance system and began to wonder if that was true here as well?
Let’s take a little stroll back in time to 2014 when the government decided to implement a fine for not having health policies. Who did that hit the most? The extension on parents carrying children on their policies was extended to 26 years old, and let’s assume 65+ year old people were covered by Medicare. Then, let’s take out the population covered by state policies such as Medicaid and other low income coverage. Finally, lets take out the population of working class people who work for companies large enough to offer health insurance packages. Whom are we left with? Small business owners, entrepreneurs, and the young to middle aged people who earn just enough not to qualify for low income healthcare but not enough to cover the massive premiums and deductibles The government decided that it was perfectly fine to literally penalize healthy tax-paying individuals for not supporting the insurance industry. Thankfully, this rule has been repealed for 2018 and onward.
Now, this obviously didn’t happen for no reason. Statements are made like there is no funding for Medicare, or Medicaid. Policy premiums continue to rise annually and at warp speed. Why is this happening? It can’t be solely based on the rise in cost of healthcare alone.
People have this misconception that doctors make too much or charge too much. The reality is that doctors are forced into insurance networks in order to service their patients with minimal out of pocket costs. Additionally, those networks mandate physician reimbursement fees that are merely a fraction of what they should be earning.
We must not forget that insurance companies are businesses. They are not non-for-profit, so they are looking to make their chunk of the change too. The increases in premiums are not enough to sustain the portion of the population that actually uses their insurance. The insurance companies could not attract members quickly enough to account for the medical bills being claimed.
That’s when the word deductible became infamous. Now, these insurance companies are charging people a hefty premium for coverage every month, but put restrictions on when/how benefits can be claimed. In some cases, people have to pay anywhere between $3,000 and $5,000 out of pocket in addition to their monthly premium before their insurance pays a penny. For the average healthy individual who sees a doctor roughly 3 times a year, that comes out to about $2,000 per visit. But hey, they say doctors overcharge.
Coming back to Jericho’s comment, as I thought about his words I realized, our both private and public insurance systems are get up in a very similar way. The young and healthy members of our society are forced to buy into a health insurance industry as a means of sustaining coverage for those who need to use it. Yet ultimately, that money is also ensuring a profit for the company as well. In cases like this it really does make you wonder if the cost of health insurance really is worth it?
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